El tensor momento-energía

As a result of the analysis made with respect to the definition of the market and assessment of SMP, it emerged that, in the geographical areas associated with this market, the market had developed insofar as widespread use, installation and roll out of resources in competition with the PSTN infrastructure belonging to the companies of Grupo PT is expected before the next analysis of the market. It is envisaged that the development of this alternative infrastructure will be supported, above all, through investment in the OLL or own infrastructure, particularly in the context of NGN, but also in the context of cable distribution networks

As has been seen, given the existence of internal constraints of prices and internal supply, it can be argued that the accesses based on the OLL and cable distribution networks must be considered at the level of the market for the supply of wholesale broadband access, leading to the conclusion that, in the geographical areas in question, effective competition either already exists or will develop.

(a) Even removing the current obligation to grant access to and use of specific network currently, as a result of the existence of operators with infrastructure at a higher level of the value chain and in view of the investment already made by PTC in opening up its network in support of ADSL services, incentives remain for PTC to continue to provide wholesale broadband access services.

It is noted that where there are operators with the possibility of providing the same type of service (including, operators who have invested in OLL) to alternative operators who may waive the "Rede ADSL PT", Grupo PT would lose revenue at a wholesale level and remain in the same situation at retail level. In this situation, the decision to terminate the supply of wholesale broadband Internet access would be unprofitable, since in the light the existence of competition at wholesale level, such a decision would not lead to an increase in revenue in the retail market.

(b) Even if the PTC and other wholesale operators with investments in OLL do not provide any wholesale broadband Internet access, it will be possible for operators who currently use the "Rede ADSL PT" wholesale offer to compete effectively in the retail market for broadband Internet access using their own infrastructure derived from investment in the OLL. In this situation, it may be concluded that the decision to remove the obligation to grant access is in line with the principle of encouraging investment in the network itself where possible and appropriate.

It is also envisaged that investments made by the alternative operators who use the "Rede ADSL PT" wholesale offer will not be lost, since they can be used with respect to the same or another wholesale offer of equal scope, or even be used by these operators to scale the "investment ladder", by investing in OLL. Notwithstanding, and where this occurs, it must be ensured that the alternative operators are informed of the possible termination by PTC of the provision of the service for access with an appropriate period of notice.

Furthermore, the investments made by PTC will be recovered, even if the company chooses not to provide wholesale broadband access to third parties in these areas, since it will continue to provide access to its own companies and to use some of the investments made within the scope of wholesale provision, which remains mandatory in "areas NC".

In this consideration is important to take account of the fact that economies of scale resulting from the dimension of the network of Grupo PT, in any of the situations mentioned, will continue to be transferred to the alternative operators who resort to investment in their own infrastructure or to other OLL-based wholesale offers which may emerge. This is because investment in OLL enables the operators to also benefit from the economies and efficiencies of Grupo PT's network.

In this analysis ICP-ANACOM took into consideration that the obligation of access implies that the conditions of access be appropriate and reasonable. Considering the analysis made above with respect to the existence of incentives for Grupo PT to maintain a wholesale operation, the view is taken that these incentives are also aligned with the existence of reasonable and competitive conditions. It is noted that, otherwise, the alternative operators who are currently supported through the "Rede ADSL PT" wholesale offer will seek new ways to

access the end user contacting operators already co-installed in these areas or investing themselves in the OLL.

Without prejudice to the above, it is important to take into account what the removal of the obligation of access would mean to the market, with the premise that Grupo PT would not continue to provide the service of supplying broadband access and another operator with infrastructure at a higher level of the value chain does move to provide such services.

Table 35 - Distribution of broadband access in "areas C" at the end of 2007

2007 Access Type

Number %

OLL Accesses 238,824 27%

Cable Accesses 411,677 47%

"Rede ADSL PT" accesses (Grupo PT) 211,163 24%

"Rede ADSL PT" accesses (OLL operators) 12,837 1%

"Rede ADSL PT" accesses (other operators) 5,309 1%

TOTAL 879,810 100%

It can be seen that in the geographic market in question, only 2% of OSP broadband accesses are supported through the "Rede ADSL PT" offer, representing only around 18 thousand accesses. Of this number, it is considered that almost 13 thousand could be easily transferred to the OLL, since they belong to operators with investments already made in terms of this offer. There are also around 500 accesses belonging to an operator with investments made in cable distribution networks.

It can therefore be concluded that, given the small number of accesses that can actually be affected, the impact (if any) of the removal of the obligation in question will always be minimal (although it may be relevant for each of the affected accesses) and not significant for the market.

As already mentioned, where the obligation to grant access is removed, in order to ensure that investments made by alternative operators with respect to the "Rede ADSL PT" are employed, there must be a guarantee that they are informed of any cessation by Grupo PT of the broadband access wholesale offer with an appropriate period of notice.

It is considered appropriate to establish a transition period of one year, beginning on the date of the publication of the final decision on the analysis in this document, during which period PTC shall continue to provide access to the services in question and may not enact changes in supply which constitute a tightening or deterioration of conditions of access currently provided to beneficiaries of the "Rede ADSL PT" wholesale offer178.

In a way that is consistent with existing obligations and which will be maintained in the remaining geographical areas associated with the supply of wholesale broadband access, the position is taken, even following the period of one year, that PTC can only withdraw access to the service in question or enact more restrictive conditions of access in a given geographical

area after providing notice of 2 months prior to the date on which it intends such a decision to take effect.

Following this period the conditions of access and provision of services (if any) will be established by means of commercial negotiation between interested operators.

The periods established allow alternative operators to negotiate the provision of the same service from other companies that have infrastructure at a higher level of the vertical value chain, to negotiate with PTC in order to maintain the service on mutually favourable terms, given the degree of (alternative) negotiating power that they possess or even opt to carry out investments in the OLL.

A similar approach was also followed by OFCOM which decided that the notification of termination of the provision of the supply of wholesale broadband access had to be given 12 months in advance, during which period the access conditions with respect to access already provided should be maintained.

It is likewise considered that this would be an appropriate period so that any migration of customers to other wholesale offers or even other operators may occur without negative impact on end users. In this regard, ICP-ANACOM will carry out detailed supervision of how such possible migration may occur and intervene without delay, in the event that it identifies any risk of loss or inconvenience to users or risk to the development of healthy competition.

ICP-ANACOM considered the possibility of the transition period of one year applying only to accesses that are currently provided as part of the "Rede ADSL PT" wholesale offer, but decided that this transition shall also apply to new accesses that will be provided in the meantime, during the specified period. This signifies that during this one year period, beneficiaries of the "Rede ADSL PT" wholesale offer can gain customers with the knowledge, however, that when this period expires (commencing from the publication date of the final decision), access may cease. For this purpose, as mentioned previously, there are alternative investments by operators which, where possible, should be preserved and safeguarded by ICP- ANACOM. These investments are also related to the prospects for providing new access. It was considered that the period of one year would be sufficient, considering the specifics of this situation, for operators to incorporate the new regulatory framework into their commercial policy and business development strategy, which should also take the future into account and may include a continuation in the supply of new retail accesses.

8.4.1.1. Conclusions

Taking into account the analysis carried out throughout the document and the arguments presented in this section, this Authority concludes that there are no relevant negative implications for the defined market resulting from the removal of the obligation to grant access to and use of specific network resources, given, in particular, the number of accesses involved and existing alternatives.

It was identified in particular that PTC has some incentive to maintain the supply of these services according to reasonable and competitive conditions. This incentive stems from the

possibility of other OLL-based operators having the option of developing competing wholesale offers, leading to a reduction in the wholesale revenue of Grupo PT. Moreover, some of the beneficiaries of the OLL have informed ICP-ANACOM that they have wholesale offers albeit still incomplete or even without any customers, but that, depending on developments in the market, they are likely to consider the development of alternative wholesale offers. Therefore, the alternative operators supported through the "Rede ADSL PT" wholesale offer may also negotiate the supply of wholesale broadband access with these operators. In addition, it was found that the possibility remains that alternative operators will make investments in the OLL, opting to scale the "investment ladder".

Another relevant issue duly considered by ICP-ANACOM is the fact that it was concluded that, given the number of accesses that can actually be affected, the impact (if any) of the removal of the obligation in question will be limited and not significant for the market.

With respect to the manner in which the operators who currently use the "Rede ADSL PT" wholesale offer in these areas should be notified and the amount of prior notice required, it was considered sufficient and appropriate to establish a transition period of one year, during which the services currently provided shall continue to be provided under conditions that are not less favourable. It is also set out that, even after the transition period of one year has elapsed, in the event that PTC intends to withdraw access to the service in question or enact less favourable conditions of access, it is required to give notice of 2 months prior to the date on which such decision is to be effected.